Game Lifestyle Company Razer to Raise at Least US$400 Million in a Hong Kong IPO

More than a decade ago, Singaporean entrepreneur, Min-Liang Tan, co-founded Razer as a maker of computer mice for hardcore gamers. Today, Razer is the world’s leading lifestyle brand for gamers. The company’s triple-headed snake trademark is one of the most recognised logos in the global gaming and e-sports community. In order to further expand its empire, Razer is offering more than a tenth of the company to raise at least US$400 million in an initial public offering.

Razer has announced yesterday the company’s proposed listing on the Main Board of the Stock Exchange of Hong Kong. The company plans to offer 1,063,600,000 shares at a range of HK$2.93-HK$4.00, or US$0.38-US$0.51.

The money raised will be used to develop new verticals in the gaming and digital entertainment industry, including mobile devices; finance acquisition that will continue the expansion of razer’s ecosystem; expand razer’s research and development capabilities; implement razer’s sales and marketing initiatives; and other operational expenses.

“Our mission from day one has been — For Gamers. By Gamers. Today, we are the world’s leading lifestyle brand for the 2.2 billion gamers worldwide and we continue to disrupt the gaming industry with the Razer ecosystem of hardware, software and services,” said Tan in a statement.

Razer has one of the largest integrated gaming ecosystems in the world. Razer ecosystem is designed to integrate seamlessly and enhance personalised experience for gamers. to date, the company has sold over 27.5 million connected devices, and it has sold over US$1 billion worth of hardware since 1 January 2014.

At the core of the ecosystem is Razer Software Platform, which had over 35 million registered users as of 30 June 2017. Razer has also just launched zGold virtual credit service, which allows gamers to purchase zGold and exchange it for digital content and items from various content providers. The company has partnered with MOL Global and Three Group to distribute zGold in Southeast Asia, Hong Kong and Europe respectively.

Razer is also actively exploring the mobile devices market, and is targeting to launch its first mobile device in Q4 2017 in US and Europe.

However, according to TechCrunch, despite being profitable in 2014 (US$20.3 million), Razer made losses in 2015 and 2016, US$20 million and US$59.6 million, respectively. As for revenue, total sales growth has not been amazing. Nonetheless, Razer’s opportunity is optimistic with the global games industry expanding rapidly.

Games are a pervasive element of popular culture and integral to the modern way of life of the world’s approximately 2.1 billion active gamers in 2016, and this number is expected to grow to 2.7 billion in 2012, according to Newzoo. The global games market is the fastest growing segment within the global entertainment industry, according to Frost & Sullivan’s research. In 2016, the global games market revenue of US$101.1 billion exceeded both the global cinema and global music markets, which generated US$39.9 billion and US$48.4 billion, respectively.

“We have built a truly unique business and our global offering will allow us to raise capital to continue innovating, invest in cutting-edge R&D and focus on designing and engineering the competitive edge, the immersive experiences and access to digital content for games worldwide,” said Tan.

Razer’s Hong Kong IPO is scheduled to commence today (Wednesday, 1 November 2017) and close on Monday, 6 November 2017. Results and the offer price are expected to be announced on Friday, 10 November 2017.

According to a report by Bloomberg, Tan, together with his family, owns about 42% of Razer. After the IPO, Tan could worth more than US$1.2 billion.

Razer is currently backed by investors, such as Hong Kong tycoon Li Ka-Shing, Singapore’s Temasek Holdings IDG-Accel, and Intel Capital.